London is 'final rinse' for money launderers

London is the "final rinse" for the world's money launderers yet the Government has failed to stop it, a Commons committee heard yesterday.

London is the "final rinse" for the world's money launderers yet the Government has failed to stop it, a Commons committee heard yesterday.

MPs on the International Development Committee were told the City of London was used by foreign dictators and criminals to hide illicit funds. More than half the $4bn looted by Nigeria's former dictator, Sani Abacha, was channelled through London, said Transparency International, an anti-corruption body.

Graham Rodmell, the co-ordinator of the firm's UK division, said there were 15,000 internal reports each year of suspicious transactions within British banks, but rarely, if ever, was there a prosecution for money laundering.

"Vast sums of money are laundered through London," he said. "London is the final rinse - it comes out legitimate." Laws necessary to counter money laundering were very simple, he added.

Ann Clwyd, Labour MP for Cynon Valley, said Britain had signed to conventions on money laundering but had not implemented them. "Doesn't it undermine our whole credibility that we haven't introduced any legislation?" she asked. The committee was also told Britain had failed to act over bribery and corruption by UK companies abroad.

Mr Rodmell said that despite there being a law since 1906 to prosecute firms here for crimes abroad, no case had been brought. Bribes offered abroad by British firms were even tax-deductible, he said.

In answer to a question, he said he had not thought it proper for the son of a serving Prime Minister to be involved in a government to government deal. Margaret Thatcher's son, Mark, made a substantial sum from the al-Yamamah arms deal with Saudi Arabia while she was in office.